Bitcoin exchange-traded funds (ETFs) were initially hailed as a game-changer in the world of cryptocurrency investments. However, recent surveys indicate that investors are not as enthusiastic as anticipated.
According to a Deutsche Bank Research survey conducted shortly after the first Bitcoin ETFs became available for trading, approximately one-third of respondents predicted that Bitcoin prices would dip below $20,000 by the end of 2024. This prediction comes as Bitcoin was valued above $40,000 at the time of the survey. Additionally, around 10% of participants believe that the price will range between $20,000 and $40,000, while roughly a quarter expect it to surpass $40,000.
The survey also highlighted that around 42% of participants foresee Bitcoin disappearing entirely in the coming years, while 39% believe it will remain in circulation. Furthermore, over half of the respondents predicted the demise or collapse of a major cryptocurrency, excluding Bitcoin, by 2026.
Factors Influencing Bearish Views
Researchers at Deutsche Bank attributed some of these pessimistic outlooks to the fallout from companies like FTX going bankrupt in 2022. It is worth noting that other trading platforms, including Coinbase and Binance, also face regulatory scrutiny for allegedly operating unregistered securities exchanges.
The skepticism expressed by respondents may offer some insight into why the launch of these ETFs has not met the high expectations initially set. While trading volumes in the funds, which were introduced by industry giants such as BlackRock, Fidelity Investments, Bitwise, and Invesco, have been substantial, there has been a decline in inflows into these funds.
While Bitcoin ETFs were met with great anticipation, recent surveys point to a more cautious sentiment among investors. The predictions of price drops and disappearance of both Bitcoin and other cryptocurrencies reflect the impact of recent industry developments and regulatory challenges. As the future of Bitcoin ETFs unfolds, it remains to be seen whether these sentiments will continue to shape the market or if renewed interest will prevail.
Bitcoin Funds Experience Net Outflow Despite Ongoing Inflows
According to a recent report by Bloomberg, Bitcoin funds have experienced a net outflow of approximately $88 million on Monday. This brings the total net inflows for the past seven days to about $1.1 billion. While new funds have continued to attract money, they have been offset by outflows from the Grayscale Bitcoin Trust, which has seen a total of $3.4 billion in outflows since converting into an ETF earlier this month.
The current market conditions have also affected the price of Bitcoin itself, which is currently trading at around $39,000, representing a 17% decrease from its recent high. Coinbase Global, the largest U.S. trading platform, has also experienced a decline in its shares, falling by 29% over the past month to $122.44. In response to this, J.P. Morgan downgraded Coinbase shares due to disappointment in the delayed launch of a Bitcoin ETF.
Despite these challenges, Bitcoin proponents remain optimistic. In April, Bitcoin is expected to undergo its “halving,” where the rewards for miners are cut in half. Historically, such events have been accompanied by bull markets for Bitcoin.
It’s worth noting that the relatively slow performance of ETFs in the crypto market can be attributed, in part, to the fact that some financial advisors and fund issuers have not yet been able to participate. Many advisory platforms require ETFs to undergo compliance reviews and trade for a certain period before they are available for trading.
However, a recent survey conducted by Deutsche Bank suggests that cryptocurrencies still face an uphill battle in convincing investors to view them as a legitimate asset class.